Why Digital Transformation Needs Customer360

Many Financial Institutions are going through a major Digital Transformation, putting the Customer at the heart of the business has never been more important.

With the capabilities of the Customer360 approach driving Digital Transformation, institutions can realize the value of their transformation objectives quickly and provide a platform for sustained future growth.

What’s happening around Digital Transformation?

Financial Services Institutions are evolving, many are trying to work out how they could build a value-add relationship with their Customers, to secure their businesses present and future. I think, the reasons for doing this can vary but fundamentally it is because the customers of the past had different needs compared to the present who in turn would have different needs than future customers.

For instance, the mega-brand and mega-experience that customers are accustomed to in the retail space highlights the gap between that and what many Financial Services Institutions have to offer. Thus, Digital Transformation provides a business platform to shape new offerings and models to better align with the current and future generations of customers.

To enable this new platform, organizations are looking at either repurposing existing capabilities, or purchasing new ones. This is done by organizations to help understand everything they know about each customer; so they can better target resources to the right place at the right time. This is part of the move from being a ‘service provider’ to a ‘relationship partner’. One of the key capabilities in this area will be the provision of a Customer360.

What is Customer360?

A Customer360 is a capability that finds all the relevant data about all customers, from across all defined systems, then pulls all that information together.

For example, imagine a customer has a joint bank account with their spouse, a credit card and home insurance. This customer also browses the institutions website looking at high value loans, has recently spoken to the contact center about some outstanding transaction queries and shares commentary on social media platforms.

All the data captured about what the customer did, when they did it and what potential outcomes occurred are probably all captured in different systems that span various parts of the business operations. The Customer360 pulls together a view, for each customer, of what data the institution knows about them from across the different systems and resolves all the differences. This is how the customer is uniquely identified in each of those systems. This view provides the single most trusted store of information about all the things known about each customer to enable the institution to make business decisions on what services they could provide for each individual customer.

The fact that the data is stored in different systems, where customers are uniquely identified in different ways and where the data can be complex to deal with are all traditional data management challenges that a Customer360 can help overcome.

So why do institutions need Customer360 for Digital Transformation?

I would argue that one of the key requirements of any Digital Transformation is to put the customer, regardless of type, at the heart of the business. This covers not just Retail customers but also Small/Medium Enterprises, High Net Worth Individuals, other Financial Services Institutions and Corporates. To enable this, institutions needs to consider how they get a high quality, trusted view of all the information they know about their customers then make it easily accessible (physically and logically) so this information can be consumed by all parts of the business. To complete the picture, historical data needs to be included to provide the basis of what decisions customers made in the past.

With this information institutions now have a clear picture from across all lines of their business of:

What customers are transacting

What customers require whilst browsing or looking at information

How customers are commenting and engaging through social platforms

How customers are engaging through online, mobile or omni-channel applications

What customers require when they call/message the Contact Centre.

What customers have done historically

Now, armed with all this information Financial Services Institutions can apply data mining and advanced analytical techniques to this rich source of data to help understand:

Is this a customer the institution wants to keep? If yes,

How to understand what value the customer represents and determine what form of service levels need to be provided?

What are the key items of interest or life events that create trigger points for the requirements for new Financial Services products and services?

What is a productive ‘Next Best Action’ that will enrich the customers experience of the institution?

Is here a trigger point that could prompt a ‘Next Best Offer’ activity? Customers get offers continually from many providers so how do institutions create the right offer and deliver it at the right time to increase the likelihood of take-up?

How to best engage with the customer for both offers and generally?

Regardless of the type, all of this needs to be done for each individual customer as well as prospects.

So, Customer360 provides high quality, trusted data to an advanced analytics platform that helps align the institutions actions and decisions on how they service the needs of their customers.

Don’t we have this already in our core application systems?

Many institutions are trying to expand the functionality of their core applications systems (core banking in Banking and policy administration in Insurance) although this brings with it may challenges. A lot of institutions have been discovering and expanding the functionality of such important systems comes at a cost and carries potential risk. Some examples include:

Because of the business-critical nature of these systems, major functional changes probably incur a significant amount of development time and testing costs to ensure nothing prevents the system from performing its primary role.

Altering a core system to capture and store information it was probably never designed to store, increases the processing capacity required to run the application. It also increases the risk that this new functionality will cause unforeseen problems that could in turn have a business-wide impact.

Many non-core systems have different ways and techniques for uniquely identifying each individual customer. Therefore, the core system will probably need to be altered to not just store these other keys, but also work out which sets of keys from across different systems relates to which specific core system customer.

The Customer360 capability would sit alongside the core and non-core application systems to provide the crucial services to them that should significantly reduce the costs and risks associated with changing such business-critical systems. It will also provide a wide range of functions that have already been prebuilt and pretested, around bringing together all these sources of information, to increase the speed and reduce the costs of delivery.

In summary

Financial Services Institutions are experiencing change and Digital Transformation is often at the heart of how they’re responding to the needs of their current and future customers. Having a high quality, trusted source of information about each customer that doesn’t compromise the capabilities of core application systems, enables advanced analytics systems to provide new insights into what customers want and when they want it.

Without this type of capability, Digital Transformation initiatives will struggle to deliver the value they promise. This is because it will be a challenge to effectively put the customer at the heart of the business when the data the institution holds about their customers, is scattered across the lines of business and is therefore highly fragmented.

Get more information about the Customer360 solution and get an insight on how Informatica can help you on your Digital Transformation initiative.